The relationship between absorptive capacity and company's performance in China

Chinese companies are now looking for improving their innovative capacities. The absorptive capacities of new knowledge are relevant to companies' knowledge gain, innovation, and profits earned. We, on top of existed researches, explore the relationship between absorptive capacity and performance, and identify the two factors which impacting on absorptive capacity-the motivation and the conformity mechanism, and the absorptive capacity. The data used in this paper are collected from about 200 Chinese companies and analyzed using the Structural Equation Model (SEM). The conclusion is: in Chinese companies, the absorptive capacity can not be separated from the external and internal supports; the transfer capacity of company has a direct impact on performance, but not on innovative capacity.